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Events

Home Events
“From Free to Paid: Testing Monetization Strategies for a Free Non-advertising-based Service” by Mr. Jingcun CAO
23Oct
SEF Seminar Calendar, Seminar

“From Free to Paid: Testing Monetization Strategies for a Free Non-advertising-based Service” by Mr. Jingcun CAO

Thursday, 23 October 2019 | 10:30 a.m.— 12:00 n.n.
1301, K.K. Leung Bldg
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From Free to Paid: Testing Monetization Strategies for a Free Non-advertising-based Service

 

Speaker:
Mr. Jingcun CAO
Ph.D. Candidate in Marketing
Kelley School of Business
Indiana University

 

ABSTRACT

The mobile app market has expanded rapidly in the last decade. However, mobile app firms of non-advertising-based services face a significant challenge when trying to monetize their free services, due to low purchase conversion rates and high churn rates. In practice, these developers usually adopt one of two monetization strategies: (1) a soft-landing strategy, with limited free service provided to current users when it starts to charge, or (2) a hard-landing strategy in which all free services are terminated and only paid users retain access to the service. Which of these strategies may provide the best economic outcome for the developers is not clear. Developers are also uncertain about whether to add exclusive secondary offerings (unrelated to the core benefits) to the app for paid users. Existing theoretical and empirical literatures, however, do not offer guidance on the above choices. In this study, we employ a series of large-scale randomized field experiments to test the causal effects of providing limited free services to users and offering exclusive secondary offerings to those who pay when they convert to paid subscriptions. We also examine the interaction effects of these offers. Results suggest app users are more willing to pay in the hard-landing condition than in the soft-landing case regardless of whether free content or free time is offered. Additionally, exclusive secondary offerings hurt the conversion rate. Further, a positive interaction effect exists between providing limited free services and offering exclusive secondary offerings. Our research provides important theoretical implications to marketing researchers, and actionable managerial implications to mobile-app managers on monetization strategies and customer relationship management for non-advertising-based apps.

FBE Mentorship Programme 2019-20 Kick-off Ceremony23 Oct 2019
"Macroeconomics with Learning and Misspecification: A General Theory and Applications" by Dr. Pooya Molavi24 Oct 2019
Other Events
214th Congregation (Summer Congregation 2025)
7Jul-8Jul
Faculty Level | Event
214th Congregation (Summer Congregation 2025)
Grand Hall, Centennial Campus, HKU
Semiparametric Identification of the Discount Factor and Payoff Function in Dynamic Discrete Choice Models
Semiparametric Identification of the Discount Factor and Payoff Function in Dynamic Discrete Choice Models
Semiparametric Identification of the Discount Factor and Payoff Function in Dynamic Discrete Choice Models
Semiparametric Identification of the Discount Factor and Payoff Function in Dynamic Discrete Choice Models
Semiparametric Identification of the Discount Factor and Payoff Function in Dynamic Discrete Choice Models
18Jun
Economics | Seminar
Semiparametric Identification of the Discount Factor and Payoff Function in Dynamic Discrete Choice Models
18 June 2025 | 2:15 PM - 3:30 PM
KK 910 K. K. Leung Building, HKU
Prof. Katsumi Shimotsu
About Speaker
Mr. Jingcun CAO

Ph.D. Candidate in Marketing Kelley School of Business Indiana University

“From Free to Paid: Testing Monetization Strategies for a Free Non-advertising-based Service” by Mr. Jingcun CAO
Thursday, 23 October 201910:30 a.m.— 12:00 n.n.
1301, K.K. Leung Bldg
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